Supreme Court Clarifies “Substantial Nexus” Requirement to Trigger Automobile Insurance Coverage

On March 25, 2009, the Supreme Court of New Jersey decided the case of Penn National Ins. Co. v. Costa.  In this case, the plaintiff, Ernest Arians, was injured when he slipped and fell on ice in defendant Frank Costa’s driveway.  The defendant was the owner of a mechanic shop where he repaired large trucks.  The defendant’s home was located right next to his shop.  The plaintiff was employed by the defendant as a mechanic.  While the defendant was working on a pickup truck in the driveway of his house, the plaintiff walked on to the driveway and asked the defendant if he needed any help.  The defendant replied that he did not need any help and continued working on the truck.  As plaintiff turned to walk away, he slipped on ice located in the driveway and hit his head on a car jack that was being used on the truck.

The big issue that arose in the lawsuit was whether the plaintiff’s accident should be covered by the defendant’s homeowner’s insurance or the auto insurance that covered the truck.  The Supreme Court decided that because there was not a “substantial nexus” between plaintiff slipping and falling on ice and the defendant’s use of the truck, the defendant’s homeowner’s insurance should provide coverage for this incident.  In many personal injury cases, complicated issues of insurance coverage arise.  A New Jersey personal injury lawyer may be able to help you locate insurance and get compensation for injuries suffered in an accident.

Under New Jersey law, auto insurance coverage exists to protect “against loss resulting from liability imposed by law for bodily injury, death and property damage sustained by any person arising out of the ownership, maintenance, operation or use of a motor vehicle.”  In order to determine that an injury arises out of the “ownership, maintenance, operation or use” of a motor vehicle, there must be a “substantial nexus” between one of these criteria and the injury for which coverage is being sought.  The Court first noted that a “substantial nexus” is a lower requirement than “proximate cause” as that term is understood in the strict legal sense.  Instead, the Court noted that the inquiry should be whether the negligent act which caused the injury, although not foreseen or expected, was in the contemplation of the parties to the insurance contract a natural and reasonable incident or consequence of the use of the automobile.

In the present case, the Court determined that there was no “substantial nexus” between the defendant’s maintenance of the truck and plaintiff’s accident, because the negligence that caused the accident had nothing to do with the defendant’s maintenance of the truck.  Rather, the negligence that caused the accident was the defendant’s failure to keep his driveway free and clear of ice and snow.  In other words, the defendant was not negligently performing maintenance on the truck when the accident occurred.   The Court reasoned that the fact that plaintiff struck his head on a jack that was being used as part of the maintenance of the car was entirely incidental happenstance to the maintenance activity that the defendant was performing on the truck. 

With this decision, the Supreme Court made it clear that it is the nature of the negligent act that is most important in determining the source of insurance coverage, not necessarily the nature of the activity being performed.  If you have been injured in any kind of accident, contact a New Jersey personal injury lawyer for assistance.  For additional information in the area of personal injury, has also written articles on mistrials due to undue influence of a juror,  lawsuits proceeding against drug manufacturers, and verbal threshold hurdles.